Bharat Petroleum Corporation Limited's (NSE:BPCL) market cap touched ₹1.1t last week, benefiting both state or government who own 55% as well as institutions

Key Insights

• Bharat Petroleum's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• 55% of the company is held by a single shareholder (India)
• 29% of Bharat Petroleum is held by Institutions

To get a sense of who is truly in control of Bharat Petroleum Corporation Limited (NSE:BPCL), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 55% to be precise, is state or government. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While state or government were the group that benefitted the most from last week’s ₹104b market cap gain, institutions too had a 29% share in those profits.

In the chart below, we zoom in on the different ownership groups of Bharat Petroleum.

Check out our latest analysis for Bharat Petroleum

What Does The Institutional Ownership Tell Us About Bharat Petroleum?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Bharat Petroleum. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Bharat Petroleum's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Bharat Petroleum. India is currently the company's largest shareholder with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 9.1% and 2.8% of the shares outstanding respectively, Life Insurance Corporation of India, Asset Management Arm and ICICI Prudential Asset Management Company Limited are the second and third largest shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Bharat Petroleum

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own less than 1% of Bharat Petroleum Corporation Limited. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own ₹2.7m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bharat Petroleum. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bharat Petroleum better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Bharat Petroleum you should be aware of, and 1 of them is significant.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.